Innovation has been the driving force of economic growth and global trading since the Industrial Revolution of engineer specialist salary, while it is slowly gaining traction in recent decades. Innovation refers to the process of introducing something new or offering a solution to a specific problem. Innovation companies are those which spend most on research and development to release innovative products that meet consumers’ needs.
Without innovation, traditional industrial plants would not be as efficient as they are today due to constant improvements in machinery performance and quality, which would lead to cheaper production costs. The manufacturing sector employs over 5% of US employment with 2% employed in research & development activities.
1. Innovation Companies are Growing Faster
Innovation companies are more likely to provide more jobs as compared to their non-innovative counterparts. For instance, in 2010, Apple launched the iPad, adding 30,000 jobs in the U.S.A and another 800 jobs overseas in Australia within six months of launch. The top 10 current innovators with the highest R&D expenditure globally employ 5 million people worldwide , with each generating an average of 7% real growth per annum over a period of 8 years.
2. Innovation is Valuable and Beneficial to Society
Being at the forefront of innovation allows companies to identify trends early and benefit from them by creating new products that consumers need. For example, one of the best innovations of modern times is the invention of the iPhone. The smartphone is not only changing how we interact with other people, but also how we learn. In addition, it has created several new businesses such as social media, apps and software development as it is now easier to access information at our fingertips. The iPhone has also created an entirely new digital economy where thousands of jobs are created by app developers and content creation for companies like Apple’s iTunes store.
3. Innovation is Much More than Just R&D
Research & Development, or R&D, is crucial to innovation but it’s not the only thing that contributes to a company’s innovative capabilities. Companies spend a significant amount of money on research but it also spends a huge amount of money in product development. Good product development is about witnessing the market and understanding customer needs, creating products that can satisfy these needs and then marketing these products to customers.
4. Innovation is a Global Process
Innovation companies are more likely to be more global in nature, with certain companies focusing on certain markets while having greater flexibility to locate their facilities where they have access to the best talent pool, or proximity to other markets with similar cultures or regulatory requirements. As innovation is globalized and companies need access to larger markets, they are willing to invest more in R&D because new technology will spread across multiple countries through FDI.
5. Innovation Requires Specialized Skills
A company’s R&D staff are required to master a number of skills, including accounting and finance, in order to monitor the correct use of funds and report financial results correctly. In conjunction with the accounting staff, R&D teams need to be IT literate so that they can access information regarding client needs for new technologies. To do this successfully, management must develop a sense of urgency about innovation and be able to instil a culture in its workforce that is willing to adopt newer ideas across all levels of the organization. Greater creativity will also become more important as it will help firms innovate better products faster as well as being able to provide customer support more quickly.
6. Innovation Require a Balance Between Risk and Reward
The process of innovation is designed to reward the companies with the most successful products, but there are also risks that can be substantial. It requires thousands of decisions about how to best use limited resources and most of these will not result in any new products. Of course, this is true for all forms of entrepreneurship but when it’s under a company name and on a much larger scale, it can cost both time and money. Successful companies have found ways to mitigate failure by using different approaches such as launching pilot programs first or ensuring that they have enough resources to make another attempt if something goes wrong.
7. Innovation is a Cultural Process
A company’s culture plays a very important role in the way it does business, the values which it promotes and the type of people it attracts. Innovation companies tend to be more flexible, allowing employees more freedom to think outside the box . Having an innovative culture also creates a greater sense of trust between management, shareholders and employees as these companies tend to get rid of traditional patriarchal systems.
8. They Are More Likely To Be Small Businesses
Small and medium enterprises are much more likely to innovate than large corporations. These smaller companies may not be able to deal with the legal and political minefields that large corporations face, but they are much more likely to extend their technology across multiple markets due to their ability to penetrate markets quickly. Small firms also provide a greater sense of ownership for employees, which encourages innovation and therefore generates more value for shareholders.
9. They’re Mainly Profitable on the Back of Their Research
The majority of innovators are profitable because they develop new products or services that meet people’s needs and this leads them back into making more profit from the same product or service.